Frostproof City Council OKs Adding Pension for Employees

The 475b fund, first suggested to the city in April by James Nelson of Nelson Financial Strategies, is a 1.5 percent contribution from employees' paychecks.

By PHIL ATTINGERLEDGER MEDIA GROUP

FROSTPROOF | Council members have added a retirement plan that employees can pay for, if they want it.

The 475b fund, first suggested to the city in April by James Nelson of Nelson Financial Strategies, is a 1.5 percent contribution from employees' paychecks.

FTJ FundChoice LLC would provide the choice of funds for investment, and contributions are based on a pre-tax payroll deduction, Nelson said.

Since it isn't tied to the city, any employee who gets one can keep it if they take another job, he said.

City Attorney Mark Smith said FTJ would be the investment adviser to employees and TD Ameritrade will hold the funds.

The Frostproof City Council voted to adopt the fund, approved a service fee agreement with FTJ and an Ameritrade Trust Company custodial agreement, and authorized City Manager Tenny R. Croley and Finance Director Melody Walsh to handle any necessary paperwork.

Council member Ralph Waters asked whether Croley and Walsh already had authorization to move funds, but Nelson said the new authorization would help them handle any "abandoned funds" if there is no officiator named to a will.

"It's a house-cleaning item," he said.

He said abandoned funds could be a nuisance if they are left in city accounts, so the authorization would allow city staff to move the funds out of regular budgets. Smith told the City Council that they should be willing to trust their staff by authorizing it.

Mayor Anne Dickinson asked if any abandoned funds would go to the state.

Nelson said that would happen, but it doesn't as long as a beneficiary is found.

"In 25 years, I've never found someone who wouldn't take money," Nelson said.

In a previous presentation, Nelson told the City Council that employees could bring money from another 475b fund, if desired.

Any money employees want to contribute outside of paycheck deductions would not be allowed, he said, because it is a pre-tax retirement fund. However, any 457b money could be rolled into an individual retirement account, he said.

Nelson said he would also be willing to work with employees on financial planning, such as income tax and estate planning.

He would also have an Internet-based portal to let employees and city officials tweak the accounts and payroll deductions.

If the city ever decides to terminate the arrangement, that would take only a letter to Nelson and FTJ, he said.

Phil Attinger may be reached at phil.attinger@newschief.com or 863-401-6981 and followed on Twitter at @PhilAttinger.